I have been with OVO for many years and have always used their calculations to ensure that my monthly payments are sufficient to ensure that I will always remain in credit throughout the term of the contract, adjusting my payments accordingly. Out of the blue I have just received an email from OVO telling me that they are increasing my monthly payments by an additional £25.00, which they say is calculated to ensure that I have a month’s credit in my account by the end of the contract term. I can understand that they do not want me to finish up owing them money but a whole month’s amount of credit seems excessive and unnecessary especially when, as far as I am aware, they have never asked me to do that before. Why now?
Solved
Monthly payments
Best answer by Firedog
Why now?
Good question! The answer is ‘nobody knows’. This new policy was introduced a few weeks ago, following on from other related policy changes at this time of year last year and the year before.
The idea of calculating Direct Debits (DD) to end a contract with zero balance was changed to aiming for zero balance at the end of the winter semester, defined as 31 March, when DD customers’ balances are usually at their lowest. There is an active campaign by Ofgem to bring customer debt down from its appalling level of £4.4Bn at 30 June 2025.
OVO is probably thinking that by persuading DD customers to maintain a credit balance of a month’s costs, there is a lesser chance of default should a customer suddenly find himself in financial straits. Many customers have done this anyway off their own back, but this is the first time the practice has been mandated. Gone are the days when a customer could allow his account to wander into debt in the middle of winter, confident that it would all come right when warmer weather returned.
Last year, we saw in early November that the reference date - next 31 March - was pushed out to the next 31 March after that. This was good news for customers in debt, because all at once they were given an extra year to pay off the deficit.
There are many who would say that keeping a month or two’s buffer as a credit balance on the account is just common prudence.
+7- Super User
- Solved
Why now?
Good question! The answer is ‘nobody knows’. This new policy was introduced a few weeks ago, following on from other related policy changes at this time of year last year and the year before.
The idea of calculating Direct Debits (DD) to end a contract with zero balance was changed to aiming for zero balance at the end of the winter semester, defined as 31 March, when DD customers’ balances are usually at their lowest. There is an active campaign by Ofgem to bring customer debt down from its appalling level of £4.4Bn at 30 June 2025.
OVO is probably thinking that by persuading DD customers to maintain a credit balance of a month’s costs, there is a lesser chance of default should a customer suddenly find himself in financial straits. Many customers have done this anyway off their own back, but this is the first time the practice has been mandated. Gone are the days when a customer could allow his account to wander into debt in the middle of winter, confident that it would all come right when warmer weather returned.
Last year, we saw in early November that the reference date - next 31 March - was pushed out to the next 31 March after that. This was good news for customers in debt, because all at once they were given an extra year to pay off the deficit.
There are many who would say that keeping a month or two’s buffer as a credit balance on the account is just common prudence.
Try applying for a refund and you will see a totally different policy appears to be in place. The attached image shows the exact position of my account at the moment. (20.10.25) I have been paying £100 per month into my account since January 2024.
+7- Super User
Yes, that’s a different policy, but not a conflicting one. The online function is limited to only making a refund that would leave three months’-worth of DDs as a credit on the account. This doesn’t mean you can’t take a bigger refund, just that you can’t do it online. This makes it possible for support staff to advise on the consequences of taking a large refund.
You can arrange for a bigger refund by (a) waiting until just after the DD has been taken, so the balance is at its monthly highest, (b) using the option to reduce the DD by 10%. Once that has been confirmed, the “three months’ Direct Debit” will have shrunk, leaving more to be refunded.
The refund mechanism is laid out here: Refund Policy | OVO Energy
+4- Super User
That is different from the Direct Debit amount being set to give 1-months credit on 31st March.
Your thread title is ‘Monthly Payments’ not ‘Credit Refunds’, and your first post didn’t mention refunds at all.
What you screenshot and highlight is not about ‘Monthly Payments’ - it’s about claiming refinds online.
if you apply for a refund online then the computer will not let you leave less than 3-months credit in your account.
However if you contact support and talk to a person then you can withdraw more and they only ask that you leave 1-months worth of credit.
(That one month is to ensure there is enough to cover your final bill if you withdraw and then leave for another supplier).
+4
I can see some of our Plan Zero Heroes have stopped by to help with some great answers here, and I hope this has brought some more clarity to the situation. Apologies if our Direct Debit review procedure seems harsh, but there are no exceptions to it really unless the review is incorrect due to a technical error on our side, for example.
An interesting reply from Firedog and I thank you for the explanation, which makes sense. It would have been nice if Ovo had provided a similar explanation instead of simply telling me that they were raising my monthly payment because I was not paying enough.
By the way to other correspondents I do not know why refunds came into the thread as I did not mention them and am not interested in claiming one.
Do Ovo make interest on the advance payments we send them?
If so do we get a share of that as this will help with our bills
+8- Super User
Hi
There is no guarantee that the money goes into an interest bearing account - many business accounts do NOT pay interest. In fact, OVO pays the bank for the privilege having the account in the first place and likely also pays fees for most transaction types, which is part of the reason why personal bank accounts are free for customers to have. They also pay GoCardless a fee for every DD collected - which is pretty standard stuff. Multiply that by a couple of million DD payments a month and the fees soon add up...
Any interest earned (if at all) would merely help to offset those costs.
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